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Nifty :25108

Technical Outlook

Day that was…

Equity benchmark extended the gains for the fourth straight session tracking positive global cues. Nifty gained 30 points to settle at 25108. Nifty midcap and small cap relatively outperformed the benchmark by gaining 0.47% and 0.31% respectively. Sectorally, FMCG, PSU Bank and Metal were the laggards. Whereas, Realty, Oil & Gas and Pharma outshone.

Technical Outlook:

* Nifty began the weekly expiry day on a positive note; however, it witnessed profit booking in the vicinity of 61.80% retracement of the previous decline and oscillated ~500 points during the session. As a result, the daily price action formed small bull candle with upper wick carrying higher-high-low indicating, profit booking at higher levels.

* Key point to highlight is that, the formation of higher-high-low continued over the fourth consecutive session however, lack of broad-based buying resulted in profit booking at higher levels. Going ahead, for a meaningful pullback to materialize, index need to decisively close above 25200, else continuation of consolidation in 25200-24700 zone amid stock specific action can be expected ahead of Q2FY26 earning season. Strong support is placed at 24700 which is 80% retracement of the current upmove.

* Structurally, Nifty has rallied 18% off April low, within which intermediate corrections arrested within 3-5% range. Meanwhile, timewise, over past three decades, there have been 12 instances wherein index has staged a strong rebound after consecutive 8 sessions negative close, garnering 7% rolling return in a month. In current scenario, with 3.5% correction already in place along with 8 consecutive negative close, we expect index to maintain the same rhythm and stage a strong rebound. Hence focus should be on accumulating quality stocks with strong earnings.

* Further, as per seasonality, October despite being a volatile month, has been one of the best month for markets in last 12 years. Nifty has given positive returns on 9 out of 12 occasions. The average return for Nifty for October in last 12 years was >3%.

* On the market breadth front the % of stocks above 50 days SMA and 200 days SMA (Nifty 500 Universe) has not witnessed significant traction as currently it is at 53% and 62% compared to past two weeks reading of 63% and 70%. Hence, we believe continuation of consolidation in the range of 25200-24700 zone.

* Key Monitorable:

* a) Development on tariff negotiations

* b) Beginning of Q2FY26 earning season

* c) Quarterly business updates

* d) Brent crude decline below 4 months low resulted into revers flag breakdown, indicating continuation of corrective bias. Falling crude oil prices bodes well for domestic market.

Nifty Bank : 56239

Technical Outlook

Day that was:

Bank Nifty continued its gain for sixth consecutive day and settled at 56,239 up 0.24%. The Nifty private Bank index has mirrored the benchmark, ending the day at 27,497 up 0.03%.

Technical Outlook:

* Bank Nifty started the session on a firm note but witnessed profit booking during the latter half, paring part of early gains. Despite this, the index managed to closed above the previous session’s high. As a result, daily price action formed a small bullish candle with wicks on both ends, indicating a temporary breather within the ongoing uptrend.

* Key point to highlight is that, Bank Nifty has witnessed a sharp rally of nearly 2200 points over the past six session, indicating strong upward momentum. However, a brief consolidation phase cannot be ruled out, with the index likely to oscillate within the 55600-56800 band in the near term. A decisive breakout above 56800 would confirm the continuation of the uptrend, paving the way for a retest of its all-time high 57600. Therefore, any dip from current levels should be seen as a buying opportunity, with immediate support placed near 54,600, representing the 80% retracement of the ongoing up move (54,226-56,164).

* Structurally, index has recovered its entire eight-day decline within the last four consecutive session of gains, indicating a sharp turnaround and faster pace of retracement, which bodes well for a sustained upward momentum in the coming session.

* The PSU Bank Index has extended its breather after recent strong up move and settle down 0.41%. As a result, the daily price action formed a bear candle, indicating period of consolidation phase in coming session. Follow through strength above this level would help extend its current up move towards to challenge its all time high 8050. On the downside, initial support is placed at 7,181, which aligns with the 50% retracement of the latest upswing (6,730–7,651).

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